They've been around for a long time now. They're around in almost every market segment, taking their slice of transactions. Lawyers are the middlemen between to parties in a legal dispute. Grocery stores are the middlemen between farms and consumers. Up until now, record labels have been the middlemen between musical artists and their fans.
Bringing two people together to do business has always been a hard thing to do. Direct contact between buyer and seller is almost always the best, but sometimes its just really hard to connect. Enter the middleman (or middlewoman). New middlemen are popping up all over the internet. Social networking sites are the middlemen between people trying to connect. Sites like Digg and Technorati are the middlemen between Bloggers and readers. Google is now the middleman between just about everything (content) and everyone (searchers).
Which brings be back to the record labels. It used to be if you wanted to make music and get it into the hands of your fans, you pretty much had to go through a record label. What did the record label really do for you though? For the most part, they did some advertising, and they got your Vinyl / 8-track / Tape / CD from you to record stores, and then into the hands of your fans.
With the costs of producing music plummeting, and the ability to do your own advertising and distribution, where's the value from the record labels anymore?
Death of a Record Label
I predict that within 50 years, maybe less, the record labels will look nothing like they do today. Oh they'll probably manage to hang around, but instead of the media titans they are today, they will be relegated to online bit bucket hosting and credit card processing. That's really the only thing that's a little bit hard to do still. The real power will be in the internet's new middlemen. Google, iTunes, Amazon, these are the places where fans go to look for music these days. What music fan goes to Universal's website to look for new music? Bands in the future will simply check the 'music host' option from their local internet service provider, register with iTunes, and then do some advertising and play shows.
Will this mean the end of music superstars? Probably not. I think it just means that hype will die down, and only the bands with true talent will last long enough to get their music into enough fans hands to be called superstars.
Will there be more bad music out there? Probably. However social networks, peer ratings and the collective audience will quickly sort the good from the bad and allow you to find good music that you like. Sites like Last.fm are doing this now.
So there's my prediction. I'll check back in 50 years and see how I did.
